The thrice-yearly survey of over 25,000 companies showed companies were less optimistic about exports and remain reluctant to increase investment and take on new workers.
"[Firms] are modernising their production plants but are planning little increase to capacity in Germany," DIHK managing director Martin Wansleben told a news conference.
The DIHK retained its forecast for German growth this year of 1.5 percent.
The report provided a modestly upbeat assessment of the economy, which shrank by 0.2 percent in the final quarter of last year according to data released on Tuesday, shocking economists who had expected slight growth.
It is more in keeping with Tuesday's ZEW institute survey of investor confidence, which rose for a third consecutive month.
The DIHK survey, which was conducted mainly in January, revealed that growth of the German economy, driven for long almost exclusively by exports, is now more evenly spread.
"However, for the first time in four years, the domestic economy is regaining its strength and compensating the reduced intensity of foreign business," it continued.
The DIHK asks companies to assess conditions or expectations as good, satisfactory or bad, subtracting the bad from the good for an overall balance.
The current conditions result was +3, the first positive figure since before the September 11, 2001, attacks dented world-wide confidence.